Machinery industry endures booms and busts

Everybody knows that industrial machinery is highly cyclical, full of booms and busts. That certainly was true during Plastics News 25 years. We reported on memorable boom times of the late 1990s, then a slow decade-long decline that collapsed in the Great Recession, a painful and downright scary time. Since then industrial production, and machinery sales, have bounced back sharply.

What a ride it’s been!

In the latter part of the 1990s, annual U.S. injection shipments routinely soared to 5,000, 6,000 and even touched 7,000 machines, according to reports from the Society of the Plastics Industry Inc. Machinery veterans said it was the most presses sold in plastics history.

“Yeah sonny, these are good times,” one old-timer told me, stroking his beard.

It was the Glory Days. Like that Bruce Springsteen song. Machinery manufacturers “complained” about shortages of motors and other parts; they stretched out lead times. Sales people high-fived each other at trade shows.

NPE 2000 set attendance records. Then the crash began. By the end of 2001, press sales were down 40 percent. After the Sept. 11 terrorist attack, much of the plastics industry got hammered. Work moved to China. To India. To anywhere but the United States.

The machinery industry took a long ride on a Downbound Train. By 2008, U.S. injection press shipments were around 2,500. Below the psychological 3,000 level.

Then it got worse. Much.

U.S. shipments plunged to Titanic levels in 2009 — 1,285 — in the depths of the biggest economic downturn since the Great Depression. (Memo to my teenage kids: You don’t want to hear the word “great” followed by anything describing a lousy economic condition).

Bregar

People who grew up in the real Depression remembered how they made bread sandwiches — without the bread.

But then magic happened. Machinery sales climbed steadily back, again over 2,000 for a few years and then — in 2012 — to around 3,300.

What happened? Why such a sharp bounce back? It’s kind of complicated, but the biggest reason is automotive sales came back fast. Plastics are making even bigger inroads than before in cars and trucks, as automakers try to reach Corporate Average Fuel Economy requirements of 54.5 miles per gallon by 2025.

Of course, during the recession, an automotive collapse slammed new press sales in the downturn, as molders could pick up fairly new injection presses cheap, especially big-tonnage machines auctioned off when companies shut down.

But the strong survived, and they are embracing not only brand new machines to replace aging presses, but new technology like all-electric machines, multi-shot, coinjection, even compounding extruders tied to injection molding machines. Robot sales are through the roof.

Pent-up demand continues to drive the capital machinery business as we reach Plastics News’ 25th anniversary.

OK, it’s not back to the 5,000-press level. That’s not likely to come again, unless we manage to reshore every single smartphone, every Barbie doll, every Etch A Sketch, every pair of flip flops.

But we do have fracking. Out of nowhere, America is now a major energy producer. To go with our massive American consumption.

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